Threatened with 50% US tariffs, Indian companies fear an economic 'tsunami'

A goldsmith works on a gold necklace at a workshop in Ahmedabad, India, July 31, 2025. AMIT DAVE / REUTERS

Indian exporters could hardly have imagined a worse scenario. Due to New Delhi's purchases of Russian oil, the customs barriers imposed on the South Asian giant by the United States, already set at 25% since August 7, are expected to double, starting Wednesday, August 27, to 50%.

The measure, which economists at Nomura Holdings liken to a "trade embargo," could abruptly halt some exports and cost the world's fifth-largest economy dearly. India's central bank currently forecasts growth of 6.5% for 2026, but the overall impact of the tariffs on gross domestic product could reach around 1%, according to Bloomberg Economics.

The United States is the largest export destination for Indian goods, and many small businesses may not recover from the blow inflicted by US President Donald Trump. Labor-intensive sectors such as textiles, leather, gems and jewelry, and seafood are at the forefront.

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